Doug Kass is Optimistic About Stocks and Sees 15 Surprises

Kass said high-frequency economic statistics were improving with rapidity and well above consensus expectations. He added that the political landscape is more market friendly given gains by the Republicans.

Kass also mentioned that sentiment is terrible with the risk premium back to 1974 levels.

Kass feels the stock market is statistically cheaper than the bottom of 2009.

The interview continued (see below) with Kass commenting on the European crisis, his view on interest rates, investor’s allocation shift to bonds, the valuation and attractiveness of American banks, and the housing market.

Phil Orlando, chief equity strategist at Federated Investors, was also on hand with Kudlow giving his opinion on the markets. Orlando referred to stocks as being “ridiculously cheap.”

Kass was quite accurate with his market calls last year. He predicted a flat market which was right on the mark, and back in August he said the market hit the low for the year (link). This was a close call, although the market went marginally lower in early October.

About a week ago, in the tradition of Byron Wien, Kass released his 15 surprise predictions for 2012 (link). Kass sees the S&P 500 approaching its all-time high in 2012 as the economy accelerates. He specifically recommends buying Home Depot (HD), Lowes (LOW), Ford (F), and General Motors (GM). There are many more predictions and actionable ideas at the link.

Kass isn’t always correct, but he is definitely worth listening to given his track record.

Disclaimer: It is very difficult to outperform a buy and hold strategy. Many investors have found themselves best served over long time horizons by investing regularly in a diversified portfolio of stocks or low cost, broadly diversified indexed stock funds. Information presented is based on analysis of past data and assessments by the Tactical Timing System model. Future performance may not reflect past performance. Profitable trades are not guaranteed. No system or methodology ensures stock market profits. Although accuracy is strived for, no guarantee is made regarding the accuracy of data presented. Nothing presented here should be considered investment advice, but merely the humble opinion of the author.